Posted
by
Unknown Lameron Tuesday December 11, 2012 @01:04AM
from the get-with-the-times dept.

jfruh writes "In the world of high-frequency stock trading, every millisecond is money. That's why many firms are getting information and sending big orders not through modern fiber-optic networks, but using line-of-site microwave repeaters, a technology that's over 50 years old. Because electromagnetic radiation passes more quickly through air than glass, and takes a more direct route, the older technology is seeing something of a renaissance."

I must say that your aim is quite impressive if you manage to hit photons with an RPG.

You misunderstand. MITM isn't about knocking "photons" out of the way, it's about injecting my own payload into the data stream and causing a communications crash. I've not tested it, but I think the receiving dish will be unable to differentiate between my packet and a regular wireless packet and will be forced to "accept" my packet causing major disruption to the communications stream. I'm fairly confident that my packet won't even need to know the encryption key used on the wireless connection.

Who'd need the accuracy to hit photons when the transmitter or receiver is an easier target? Plus, taking out the data link hardware would be too obvious and easy to fix. A highly focused microwave beam that disrupts the link at seemingly random intervals would be more fun.

In all seriousness is there anything anyone could do if you owned an apartment in between two microwave antennas and decided to wallpaper it with tin foil?

For that if you lived between your neighbour and the mobile phone mast would there be anything to stop you wallpapering the back wall to block reception in their house? My guess is not since when T-Mobile stopped working they told me that someone's new flats were blocking the signal and I was SOL. Contract terminated, end of story.

No tin foil needed for microwave antennae. There's a reason it's called "line of sight" transmission. If you can't see your target (at least with binoculars), then the microwave transmission will be spotty at best to begin with, if it doesn't outright not work.

As for cell phone signal, which has an easier time penetrating normal structures, you still run into issues with regular old construction materials. Some insulation is aluminum-backed, I've even seen apartments with aluminum foil put up underneath the paneling, presumably to help hold heat in. Then for larger buildings, the metal frame itself or the steel rebar in concrete structures poses a huge obstacle for any EM signal.

I'm not sure you can really make a man-in-the middle attack, the summary must be mistaken cause I don't think this technology is 50 years old.
This is "line of site" microwave technology, I suppose it allows them to communicate insanely fast from "sight to cite", that is to say, allowing them to spread information at the speed of rumor, the fastest known way to communicate in the universe. Any man in the middle attack attempt would add a noticeable lag.

If it needs quick transmission of information, then it does reflect reality.

Oh it reflects reality, alright. But it is detached from the companies whose stocks the market is supposed to represent

It reacts to other people buying/selling -- a few flash crashes have already demonstrated that. One faulty algorithm accidentally dumps lots of stocks and the entire market goes into a tailspin (with no actual cause)

No value is destroyed other than for those who decide to sell their stocks because the prices changed with "no actual cause", and even that value isn't destroyed it's transferred to those who bought the stocks when they were priced way under their actual value.

Sure I am. If a trader wants to set his stock to automatically get sold because someone elses makes a transaction on one side of some threshold price, that's his business. He'd be an idiot of course, but that fine. Still no value is lost (you know the only claim I'm arguing against) - it's transferred to whomever bought the stock because they didn't use stock prices as the sole factor in decision making.

It simply doesn't matter where the market goes unless you buy or sell while it's going there. If you're trying to make money on minute-by-minute trading, you'll be beat bet those doing millisecond-by-millisecond trading. But if you're saving for retirement you can ignore all that. I found the "flash crash" amusing, despite having my life savings in securities affected by it. Bit silly, really.

That only harms the corporations that hire incompetent programmers who write faulty algorithms. If you have confidence in a company's business and see its price falling, what do you do? You buy. Only to sell it at a big profit after the people realize it was only a faulty algorithm that dumped the stock. Where is the harm in that? Financial Darwinism at its best!

Go read up what high speed algo traders are doing and you might change that opinion.They are abusing their latency advantage by adding orders that they cancel microseconds later, and other manipulative events that siphons value from other traders.

Your truck analogy would be me selling you 1.5 ton gold, and being aware that you're going to drive 2000km and sell it at a profit, after selling it to you I phone my contact 2000kms away and have him sell another 1.5 ton gold at your target destination. When you arrive there, my contact have ruined your initial profit opportunity, and you're either stuck with no liquidity or can sell your 1.5 ton gold to my contact agent at a loss. So not only did I steal your opportunity, I decided to earn money off you by selling my gold to you at first for profit, and then buying it back, at profit again.

This is not about me having an 18 wheeler, it's about me being massively priviledged in both capital, resources and information flow and using it to vampire money from the efforts of others. It doesn't add value, or efficiency, it removes it and adds voltatility and risk to everything.

Because of certain taxes that East Asian governments impose on financial transactions, high-frequency trading hasn't made such inroads there.

As long as our government continue to codify crimes into the financial system, the system will continue to act criminally. If we restored the former definition of the word "crime"* this problem (and many, many, many others) would simply not exist.* novel concept- forbid crime.

I don't think I understand you. Are you saying we should legalize fraud and bank robbery?

I think hoboroadie is saying that we have -already- made fraud and bank robbery legal by the way we allow the system to work (e.g. high-frequency trading and it's associated stock manipulation being allowed - my example, not hobo's)

There are several answers to "how is this legal" but they boil down to a lack of political will to outlaw the practice. You could blame the politicians for being the in pocket of big Wall Street firms, or you could blame the small investor for not marching on Washington in an outrage. Take your pick.

Because they make the rules. They pay Congress. They get what they want. Its why their income has increased and most everyone else's income has not. Its why they made a profit in the last economic disaster. Its why they were bailed out knowing they would need to be bailed out. Its why they made a profit on being bailed out. Its why they all made bonuses on the fact they "failed." Its why Congress has blocked three calls to investigate and punish the people responsible for violating the law.

I've worked in HFT for 7 years, at 2 companies, and I can tell you from this experience that you are wrong.Entering and order and cancelling immediately repeatedly goes by many names, e.g. flashing, and is illegal. Companies that do it will at a minimum get fined (eliminating possibly profit from it), and can be expelled from the exchange - meaning no future profit.ALL KINDS OF MANIPULATION ARE ILLEGAL.Being HFT doesn't change that.

BTW I've seen the kinds of fines that the SROs can hand out (this was from a mistake, not even manipulation), and they are enough to make you blanch.

The SEC has been investigating HFT for years, learning whatever they can, and believe me, any company that can singlehandedly push the markets around is taken very seriously. A working stock market is the SEC's #1 concern.

HFT uses that same trades that people have used for years, such as arbitrage, but using technology to make it more efficient.

Yeah? And what about the liquidity credits? Thats most of what it is all about. HFT has not added to the market, rather it has destroyed the market. There is no incentive for anyone not of the HFT ilk to keep more than token orders in the system. HFT overwhelms any real (aka economic) based trading and trends. Look at the market stats for NYSE (the formatting will be bad, sorry!)

You mean rebates. It works like this:You want to start a new "exchange" (ECN). No one wants to trade there - why would they, there isn't anyone buying or selling there: no liquidity.You come up with an incentive fee schedule that will encourage market makers, and liquidity providers:In every trade there is a passive and an aggressive side. Charge the aggressive side a fee (almost all exchanges do), but then rebate some of it to the passive side (almost always a market maker).Hence, companies can make money by providing the market making service to the new exchange. Traders are encouraged by plenty of liquidity and low fees (compared to the existing exchanges). The liquidity is there because of the incentives.

Note that market making is very risky: leaving passive orders around the top of book is dangerous - when stocks change in value aggressors "sweep" the book, which is expensive for a market maker. The make a very small amount from most trades, but can lose it all on a single sweep.

They have to be very low-latency to make it profitable.

And yes, it's a service. Good luck running an exchange without market makers. Why would anyone submit orders to your empty books? What quotes would you publish?

2009 was a high point in HFT in equities - I know what I'm talking about here. Trading took a huge hit due to the economy. Lower trading means less money for HFT. HFT makes money from busy markets, high liquidity and moderate volatility.

Before their trade can go through, the HFT system immediately buys trader 1's Xsomething for $1.01. It then immediately sells that stock to trader 2 for $1.02.

Thus the HFT system has increased costs for everyone, while increasing this "middlemans" worth because he is physically closer to the exchange and can intercept legitimate orders as fast as light. Should proximity to the exchange give y

In your example, Trader #2 wouldn't agree, since $1.02 is over his budget.

Here's how it really works.

All market participants send their orders into the exchange. For simplicity let's stick with limit orders: A limit order is like a budget: I'm willing to pay up to $x for stock y, or I'm willing to sell stock y for as low as $y.Ignoring the open, since it complicates things, during the day all the limit orders are resting (passively) on the book. Generally these passive orders are submitted to the exchange by market makers. In liquid stocks the best buy will be 1c below the best sell - in other words trader P is willing to but at or below prise $X and trader Q is willing to sell at or above $Y and Y - X = $0.01. Since the exchange cannot fulfill those orders by matching them they must rest on the book.Now enter an investor - or actually his broker. He wants the best possible price. Suppose he is buying. In order for him to get a trade, he must be willing to pay at least the minimum sale price - in the example above that would be $Y. If he submits lower than that his order won't trade. If he submits higher he gets price improvement and still matches the best price available of $Y.The exchange cannot match at worse prices than the best bid and ask - and there is a national best bid and ask (NBBO) to protect people.Where does HFT come into this? He's usually P and Q. He's the passive trader. And if you simultaneously submit a 1 lot market order buy and a market order sell for the same stock you will lose $0.01 - this is how the market maker makes money.There is no HFT between you and the exchange.Note - the market maker is actually taking a significant risk. These prices can change rapidly. When they do, aggressive traders send "sweep" orders, which just means they can match several price levels. The exchange matches the market maker's order with the sweep, but the value of it has changed, and the market maker loses a significant amount of money. They avoid this by trying to adjust their prices as quickly as possible.Also - without the market makers you'd have an empty book - and no one to trade with.Make things harder/slower/more expensive for the market maker and the spreads widen - meaning it costs you more to trade. They call this inefficiency.You actually see this in other markets - such as government bonds where they have "work-up" which is very much like a minimum hold time. They are much more inefficient markets - treasuries are expensive to trade partly as a result.

"Beyond rebates, another key concern is the practice of flashing prices, which helps market makers or investors discover where others want to buy or sell stocks. This practice is widely used by high frequency traders and is allowed by BATS, Direct Edge and Nasdaq OMX, while NYSE Euronext has been a vocal critic against the practice."

For anyone who doesn't have a login for ft.com, you can view the google cache (High Frequency Trading Under Scrutiny) [googleusercontent.com]. The specific practice dubbed "flash orders" is not described in further detail, but here is a timeline of the relevant press releases:

> What if I find out (legally) that somebody is going to deliver 1.5 tons of gold 2000km away and are> driving in a truck to deliver it. If I've invested heavily in airplanes, I could deliver 1.5 tons of gold to> that person and beat the truck guy so when he arrives his opportunity is lost and has to sell it to me> cheaper than I sold it to the target person. This is completely legal, and how the world works. I was> smart investing in airplanes.

The main reason the traders want microsecond responses is to respond to each other, not to developments in the real world.

Once one trader buys shares, these change in value, which can trigger automated responses from all the other traders. And frankly, the combined algorithm of all these traders is what makes the market behave as it does. And that's so complicated that nobody can test it for every eventuality (also, the algorithms are secret). I can see that some people think that there is an element of randomness in that.

I think it is more like a double pendulum, or the butterfly effect. Science can explain what happened, looking back, but science cannot easily predict what will happen in a few minutes. It does have an element of randomness. It is not completely random, but to a layman it sure seems to be random.

Unfortunately, recent history has shown that the traders understand the market just as well as any layman. And that means this is just a form of gambling.

High Frequency trading is essentially the action of manipulating the system, constantly creating and destroying orders faster than others involved in the market.

By this, you can essentially become a man-in-the-middle for market transactions and skim a small amount off of each.

Additionally, many of the algorithms simply forge orders and then subsequently cancel them faster than the system can process them. What this does is basically slow down the system for everyone else, and create a lag that they can further take advantage of to skim off the top.

The major trading indicies are OK with this, because they are paid on a per-transaction basis, and happily collect their fraction of a cent from each of these high-speed traders.

In some low volume, they do represent increased liquidity in the market and they do bring buy-sell spreads down. This is why it was first allowed in the 1990s by the market makers.

Today, they represent something like 60%-80% of all market traffic and simply skim dollars off of trades. They invest big money in artificially delaying other people's transactions to manipulate the spread between a buy and sell order and to take advantage of market swings, because they can issue multiple buy-sell-buy-sell sequences before a single long-term buyer is capable of getting a single order in.

It is nothing more than a high-tech fraud... it appears to be legal right now, because nobody has decided to stop it and has many powerful billionaires behind it, but in the end, it's not much different than the scheme in Superman 2 or Office Space. Skim a quarter penny off every transaction and I guess nobody notices....

She (yeah, she) told me that she thought it was evil, but she is paid too well to say anything. She seriously makes a half million USD per year AND has a private account in the trading system that returns 3% PER DAY.

She (yeah, she) told me that she thought it was evil, but she is paid too well to say anything. She seriously makes a half million USD per year AND has a private account in the trading system that returns 3% PER DAY.

I've been paying into a self invested pension since March 2010. If I'd been making 3% per day, my very first payment into the pension would now be worth around 30,000 trillion GBP. Even if we only count trading days it I think it would be around 4 trillion GBP. (sorry, can't be bothered to work out exactly how many trading days)

Nobody is making 3% per day compounded. Sure, 3% per day for a short while on a relatively small investment is possible. My best investment ever made a little

The major trading indicies are OK with this, because they are paid on a per-transaction basis, and happily collect their fraction of a cent from each of these high-speed traders.

That, and that the regulatory environment has locked in the incumbents to a cartel position so that it's impossible for a new market (say a fair market where orders can't be cancelled for 15 minutes) to compete. NASDAQ couldn't be started today.

This is bullshit.1. Many exchanges have message rate limits.2. Send ing then cancelling repeatedly is illegal, and is monitored for by the exchange3. ECNs (basically exchanges) charge for TRADEs NOT for orders, quotes or other messages. Infrastructure for high messaging rates costs them, so they have an incentive to keep rates DOWN. In fact, they have a minimum message per trade ratio, to control this.4. There is no way to be a mitn. Each participant sends orders and cancels to the exchange. The exchange ma

Always good to be reassured that the market reflects the intrinsic value of the companies instead of behaving as a high-tech casino.

There is a reason why people who need numbers that are provably random, compute a hash value of stock indexes. Wall Street has build the world's most sophisticated (P)RNG.

All these stories about traders needing ultralow latencies is a symptom of a fundamentally broken system. There are places where low latencies add value, stock trading is not one of them. Reduce the latency of everybody involved in the stock market, and nobody will have gained anything (except from the tech companies selling the technology being used).

The system should be modified to be round based rather than real-time. 10 seconds per round is long enough that all traders can have equal access regardless of how far they are from the stock exchange, and it is short enough that it won't be a hindrance to long-term investors. A round could spend a couple of seconds executing the trades, then publish the results, add another couple of seconds for communication, and traders will still have six seconds for calculations before the deadline for the next trading round.

With such a round based system you will change from competing on having the shortest distance to competing on having the best algorithms. Nobody will get an unfair advantage by having a shorter distance. Even if somebody does have one second more for calculations due to shorter distance, somebody further away can make up for that by a small increase in processing power. This is different from the latency based game, where no amount of processing power can make up for the additional latency.

people who need numbers that are provably random, compute a hash value of stock indexes

What are you saying? That the stock market is random or that you can snapshot it and use it as a random seed? The first is wrong and the second as an actual implementation seems highly contrived and improbable. What kind of people are we talking about that would do this? The market seems like a rather arbitrary choice for this too when you could use 1000s of other measurable/sampleable things from within your code. Lets

What are you saying? That the stock market is random or that you can snapshot it and use it as a random seed? The first is wrong and the second as an actual implementation seems highly contrived and improbable. What kind of people are we talking about that would do this?

An actual place where this is used is seeding PRNGs used to select people for jury pools. They want the seed to be something verifiable by third parties after the fact, but not anything that could have been predicted in advance or manipulated to determine who will be in the pool.

All these stories about traders needing ultralow latencies is a symptom of a fundamentally broken system.

So what's broken? Before we start fixing things, shouldn't we have a problem first?

The system should be modified to be round based rather than real-time.

Real-time looks better to me.

10 seconds per round is long enough

That's a bit too long for a round. How about 10 nanoseconds instead? I might be a bit facetious here, but I see no reason to help out slower traders. The market exists to trade things, not to play favorites. Those low latency traders have to work hard to gain their modest market advantage. And that is as it should be.

In addition to the usual market benefits (such as lightning fast arbitrage and hedging, greater liquidity, etc), we also have a great arms race going on. This whole story is about a concrete spin off of HFT -- better microwave communication.

Nope, won't work. Laws of physics must be observed. Take your 10ns proposal and subtract the communication latency to find out how much time is left for computations. Turns out that the communication latency alone is going to be 3-8 orders of magnitude higher.

What you need to do to make the model workable is to consider the best case and worst case latency for the traders and use that to compute the best and worst case time available for computation. And it is the time av

I might be a bit facetious here, but I see no reason to help out slower traders. The market exists to trade things, not to play favorites. Those low latency traders have to work hard to gain their modest market advantage. And that is as it should be.

Except your statement is self contradictory. What you propose favors those with the lowest latencies while kasperd's proposition actually levels the playing field. The more participants the better the trade, otherwise the market devolves into an exchange betwee

HFT arbitrage largely exists because of the ability to make bids/offers with no intention of completing the transaction. It's arbitrage -only- because they have the ability to act in bad faith in contracting for a sale. Cancelling bids/offers should be permitted only where there is a bona fide reason which would be valid in other contractual context - like typographical errors and honest mistake where enforcing would be manifestly unjust.

Those low latency traders have to work hard to gain their modest market advantage. And that is as it should be.

Who cares if they worked hard? Life isn't first grade and you don't get an "A" for effort.

Perverse incentives are bad. HFT adds no value. Therefore things that incentivize removal of latency (short-term goals) at the expense of say, detecting and shorting the next Enron or pumping dollars into a promising startup or trading your less risk-loving dollars for a VC's so he can invest in the next sta

A round could spend a couple of seconds executing the trades, then publish the results, add another couple of seconds for communication, and traders will still have six seconds for calculations before the deadline for the next trading round.

Do you know how your system would work? The big traders would hold their trades until the last microsecond of the time block. This would happen no matter which deadline you use.

Keep the quotes secret, you say? Well, I have some bad news for you. The big investment banks have information about the trades that go through them. They know the way the wind is blowing. You don't know that.

The longer the latency is, the worse it is for the small trader. Information ALWAYS helps.

As a long term investor, if I want to buy, I buy at the current ask price, if I want to sell, I sell at the current bid price.

I depend on there being people who want to offer prices. They offer those prices because they think that they can match buyers to sellers. They make their money from the difference in bid and ask prices.

Make them slow down and they'll have to expand their bid/ask spread to allow for the fact that the market might move between them finding a seller and them being allowed to sell to a buyer.

Sure, by having small spreads, there are then people who think they can make money from short term price fluctuations, but they're making tiny amounts and therefore having to make huge trades. That's great for me because it means there's plenty of liquidity. Make the spreads wider and they'll disappear from the market - if shares have got to go up 5% to even break even on a trade then there won't be any day trading. But I'll be losing 5% on every deal as well.

There are abuses of the system. Most of them are already illegal but are either currently impossible to detect or there isn't an incentive to investigate them (or both). Fix that part of the system and HFT just becomes another way to invest that complements the long term investors who don't want to play a high adrenalin, high stakes game.

Of those, how many can only be perfomed by the Federal Government? California probably shouldn't have a say in how Maine designs their roads, fire departments, or a whole host of other services.

Trash collection is an interesting one as well. Why must that be a government function?

1. My hometown had trash pickup as a government service. 1x/week, extra fee on your property tax bill.2. I then lived in a rural area in a non-incorporated area. I could hire someone to pick it up, or I could just load up my

There is a simple solutions: Do not allow orders to be pulled before it's been on the exchange for 10 seconds. Right now ordres are placed and pulled dozens of times every millisecond. I do not consider an "order" which is pulled within a millisecond anything but noise and market manipulation.

Hmmm. Webster DOES have it, defined as "a straight line from the muzzle of an artillery piece to a target". Definitely "citation needed". Dictionary.com says origin 1905-1910. I have taken an instant dislike to the expression, based on perceived lack of usefulness, homophony with almost-synonym, and IMHO probable origin in the misspelling of said synonym. Webster tells me to "like" it on Facebook; if there was a Facebook "dislike" I'd even consider signing up for a Facebook account.

When you have hundreds if not thousands of highly educated minds bent on squeezing out the very last drop of speed to facilitate an activity which is right up there with spamming in terms of societal benefit, well it strikes me as a tremendous and tragic waste. And yet this is what pays the bills. So: score it one point for capitalism. Yay.

When you have hundreds if not thousands of highly educated minds bent on squeezing out the very last drop of speed to facilitate an activity which is right up there with spamming in terms of societal benefit, well it strikes me as a tremendous and tragic waste.

It is only sad that people are working to squeeze more speed from the transmission speed
The truly tragic part is that people get an edge by buying server rooms closer to the stock market to win a few picoseconds

That's like paying $100 bucks to the dealer to be able to see other guy's hand in a poker game.

That's kind of the problem; it DOESN'T pay bills. Or atleast, it doesn't pay any additional bills.HFT does not add any value to the market, therefore they do not increase the amount of bills that can be paid as a whole.They extract money from a system at the cost of other parties involved; the traded companies, long term investors, pension funds, etc.

Microwave technologies have been in use for point-to-point connections for decades by the military and by broadcast television stations. Point-to-point wireless microwave transmissions, which operate in the 1.0GHz to 30GHz part of the spectrum, require line of site, though signals can be repeated along the route. A good signal -- such as between two mountaintops -- can travel as much as 300 kilometers, or around 186 miles.

Only serves to make shares more volatile. Why is this sh1t allowed again? also why when a group of ordinary private individuals find a way to exploit the HFT algorithm's of the likes of Goldman Sachs do they get sent to jail and not the high-frequency traders themselves? Messed up world we live in.

It is allowed, because those who do it can make a lot of profit. And profit made counts as GDP. GDP is the measure for the wealth of you country. While it is totally bogous today, it is still used as the main measure. And the measure indicates that reducing the opportunity to make profits on finance markets will reduce the GDP which will reduce the wealth of y country. No politician wants that. Furthermore, a lot of people previously working for the finance industry are now in government positions in the US

You really think algorithms that feed off of and fight each other on microsecond timescales, placing and then shorting more orders for shares of companies than exist in the entire world, reduce volatility?

You really think algorithms that feed off of and fight each other on microsecond timescales, placing and then shorting more orders for shares of companies than exist in the entire world, reduce volatility?

I know for a fact that HFT's reduce the spread between BID and ASK because numerous studies have been done showing empirically that this is the case. This means that all the people that cry that they are "siphoning money off the market" and other such crap are full of shit. You are getting better BID's and ASK's because the HFT's are in the market, therefore their percentage of the transaction is just a few for a worthwhile service.

The New York Stock Exchange automated quote dissemination in 2003, and we use this change in market structure that increases AT as an exogenous instrument to measure the causal effect of AT on liquidity. For large stocks in particular, AT narrows spreads, reduces adverse selection, and reduces trade-related price discovery. The findings indicate that AT improves liquidity and enhances the informativeness of quotes.

If your orders have to transit hundreds of km, whether it's at 3e8 or 2e8 m/s, you're already at a disadvantage compared to those that have their servers co-located with or next door to the exchange's servers.

I was involved in establishing one of the first major Electronic Markets in Germany. The country was quite decentralised with regional financial centres so we made sure that everyone communicated with the exchange (situated in Frankfurt) at the same speed. We even had line simulators to ensure that users in Frankfurt saw similar response times to users in Hamburg.

Now exchanges are more or less forced to join the race for the bottom by offering co-lo services (rackspace in the Exchange) where you are just a LAN switch away from theeExchange infrastructure. If you don't support that, the alleged "liquidity" moves to another exchange. Inside the machines, the algorithms are now run on the graphics cards (cheap multiprocessing) so they can run evven faster. Others use custom signal processing hardware.

Users actually issuing buy or sell orders to hold are never that close, the decision making happens within the institution not in the Exchange building. The "algo" machines just act as a man in the mmiddle driving prices to their advantage. Also, the algo traders are imposing a massive load on the order book and matching code within the exchange's systems. generally speaking the systems were chosen for reliability rather than pure speed.

I have long argued that stockmarkets should have a 10 second order freeze. That would mean that if you place an order to buy a stock at a given price then you can't remove that order for a whole 10 seconds, you have to stand by your order for that amount of time.

Thousands of orders are placed and pulled every second, even every millisecond. There is a steady flow of orders being placed and pulled.

Consider this: Is an order to buy or sell a stock which is pulled within a millisecond a real order, or is it just market manipulation?

Time to train flocks of pigeons to fly in the path of the microwave links? That's sure to disrupt their latency when they have to retransmit due to packet loss... One could call this Flock Of Pigeons Denial Of Service.

By putting these sorts of devices directly on leased connections from the stock market, adjacent to the stock market, they eliminate the need for the extremely expensive and often quite unreliable remote high speed connections. I was recently privileged to hear a presentation on the risks of data loss on those lines: they're apparently using multicast for high speed synchronoous transmission, But by the time you've checksummed and re-assembled your data and re-collected the lost packets, it can actually be _slower_ than normal TCP, and the the data verification technologies are often poorly tested.

The key to using the FPGA's is to tune and simplify the models that are stored and processed locally, in place of the expensive remote data centers. And updating those devices doesn't require the low latency and high speed: the analysis of stored data and updates of models can be done remotely and much more slowly.

I am really confused here... why this is being talked about like it is ancient tech that's been forgotten?

I used to be the admin of an outdoor recreational center and I've personally used microwave bridges a lot for these sorts of applications. It's very common in rural areas to do use microwave or open spectrum in areas where you can't just dig and put down fiber or cable. It doesn't surprise me in the least that it's being used in applications like this.

If you are talking about off-the-shelf solutions, then gigabit microwave is a happening reality. More than a few companies are more than happy to sell you (and the government) the stock equipment they offer for this. Just search the web for 'gigabit microwave backhaul' and MULTI-gigabit speeds will be in your face.